PEMBROKE, Bermuda /PRNewswire-FirstCall/ -- Tyco Electronics Ltd. announced its intent to initiate a restructuring to consolidate production of its automotive products in key manufacturing sites throughout Eastern and Western Europe. The proposed changes, which are subject to consultation with several local works councils and the European Works Council, would involve three automotive plant closures and restructuring of operations at several facilities in Spain and France, and would impact approximately 850 employees.
According to Tyco Electronics Chief Executive Officer Tom Lynch, "These actions are the next steps of the broader strategic initiative announced last year to streamline our operations and improve our productivity in all areas of our business."
Based on current foreign exchange rates, the company estimates that charges associated with the European automotive restructuring plan will be approximately $155 million, with an expected completion target within 15 months. In the fiscal fourth quarter, the company now expects restructuring-related costs of approximately $135 million, or $0.27 per share. This compares with prior guidance of $67 million, or $0.09 per share for the quarter. As a result, the company now expects GAAP (generally accepted accounting principles)-diluted EPS (earnings per share) from continuing operations of $0.38 to $0.40 for the quarter. On an adjusted basis, the company continues to expect EPS from continuing operations of $0.65 to $0.67 for the quarter. As previously disclosed, the company expects an average payback of approximately three years on costs associated with its overall manufacturing footprint simplification program.
About Tyco Electronics
Tyco Electronics Ltd. is a leading global provider of engineered electronic components, network solutions, undersea telecommunication systems, and wireless systems, with 2007 sales of $13.0 billion to customers in more than 150 countries. We design, manufacture, and market products for customers in industries from automotive, appliance, and aerospace and defense to telecommunications, computers, and consumer electronics. With over 7000 engineers and worldwide manufacturing, sales, and customer-service capabilities, Tyco Electronics' commitment is our customers' advantage.
Adjusted EPS (earnings per share) is a non-GAAP measure and should not be considered a replacement for GAAP (generally accepted accounting principles) results. Adjusted EPS reflects earnings per share from continuing operations before unusual items, including costs related to legal settlements, restructuring costs, loss on retirement of debt, and other income or charges adjusted earnings per share). The company presents adjusted earnings per share because we believe that it is appropriate for investors to consider results, excluding these items, in addition to our results in accordance with GAAP. We believe such a measure provides a picture of our results more comparable among periods because it excludes the impact of unusual items, which may recur occasionally, but tend to be irregular as to timing, thereby making comparisons between periods more difficult. This limitation is best addressed by using adjusted earnings per share in combination with earnings per share (the most comparable GAAP measure) to better understand the amounts, character, and impact of any increase or decrease on reported results.